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Tuesday, November 17, 2015

Protecting Your Covenants

One Board
member asks, “In your Board training
class, you mentioned that a benefit of converting our community from a common
law homeowners association (HOA) to a statute Property Owners Association (POA)
permits us to rely on automatic statutory liens, rather than having to file
paper liens on delinquent homeowners.
What if our Declaration of Covenants (CC&Rs) already says that we
don’t have to file paper liens, even though we are not a POA?”

Great
Question! If your community is not
submitted to the POA, then a paper lien is still required to protect the
Association’s debt claims, regardless of what is written in your
Declaration. Your Declaration doesn’t
overwrite the law regarding property lien notification.

There are
certainly a lot of reasons to convert communities over to Georgia’s Property
Owners Association Act (POAA), and we encourage all of our clients to take
steps to gain such protection. Here are
some of its benefits:

Creates
certainty – HOA authority is constantly changing under court challenges, but more
of your regulations are locked if you are operating under the POAA

Explicitly
states homeowner protection from being sued individually against claims others
may make against the Association

Provides
21 days notice - rather than the normal minimum 10 day notice - required for upcoming meetings

Clearly
allows you to hold renters liable for their actions

Places
prospective owners on constructive notice about assessments

Shifts
the burden of collection expenses onto the delinquent homeowner

Automatic
statutory liens established, so you no longer have to pay $200+ in legal fees filing
paper liens

Avoids
lien invalidation due to accidental misspellings

Buyer
and seller jointly liable until all funds collected at closing

Association
may foreclose on HOA debt while leaving the home loan bank note in place

Blocks
a judge’s arbitrary waiver of late charges, fines and attorney fees

Amendments
to the governing documents can be applied equally to everyone, not just those
that voted to approve an amendment

Creates
a one year time limit for challenges against amendments

Establishes
a range of 66% to 80% required approval for future amendments

Any
regulations that are a violation of federal/state law may be amended
automatically without a community-wide vote (such as removing rules that are
now considered Fair Housing Act violations)

If your community is currently operating under a
common law HOA regime, get with your property manager and legal counsel to
explore how you can enact the above protections!